Alright, now it’s time to get down and dirty. I won’t bore you with the super technical details of what blockchain is but I’ll try to point out the parts that are most relevant for a Leftist™ like yourself. So let’s start with the big picture.
Traditional vs. P2P Networks
When nerdy tech guys are trying to design their IT infrastructure, be it for a large company’s internal information sharing, a startup’s “disruptive” new product, or just something they’re doing for fun, they need to decide what the overall architecture is going to look like.
Traditionally, IT infrastructures have looked like the picture below. In the center we have a central Server that contains all of the information or resources that somebody’s internet connected device or Client might request. This is called the Client / Server model.
Central Servers are the “Job Creators” of IT World
The majority of the applications that you probably use on a regular basis while interacting with the internet use this model. For example, when you’re retweeting that hilarious video released by MeansTV or browsing the dumpster fire that is r/therightcantmeme, you’re device is communicating with Twitter or Reddit’s Server to show you content made by other users or to tell it to publish your post.
As you can probably tell, there are some downsides to a Client / Server Model in a Capitalist economy. Imagine you’re a big tech corporation that owns the servers that provide data to clients (ie, users like you) and you’re noticing information being shared that you don’t like. Since you, the corporation, are the owner of that server’s data, you can easily censor what is shared amongst the clients and what is not. From a technical standpoint there are downsides to this system because there is one entity which contains all of the data so bad actors can take advantage of this single point of failure to take whatever is being stored in it. On top of that, maybe you as a corporation can make money by sharing the data created by your users without their knowledge giving bad actors a semi-legal way to understand social networks to create better campaigns of disinformation during political elections.
Alternatively, another type of architecture someone can choose to implement is a Peer-to-Peer (P2P) Network. In a P2P Network, peers (usually a computer) pool their resources like processing power, or memory space together and make it directly available to other peers and network participants without the need for coordination from a central server. Imagine if all of the clients banded together to share their resources amongst each other democratically instead of relying on servers to provide data and resources and overthrew the bourg… I mean servers. That’s a P2P Network.
No Gods. No Masters.
There’s a decent chance that if you have ever used a torrent to download something like music, movies, or books, then you’ve probably taken advantage of a P2P Network. P2P Networks became popularized back in 1999 when Napster came on the scene to provide free MP3s to music fans across the world through file sharing. Their P2P based file sharing system was taken and slightly adjusted by a series of new entrants like Gnutella, LimeWire, Frostwire, BitTorrent, and lots of others. Before authorities, pushed by large media companies, cracked down on these P2P Networks, it wasn’t too difficult to download every Radiohead album at decent quality so you could be sad for free. What’s also really cool about P2P Networks is that they form the foundation of blockchain networks like bitcoin.
Pirating is Praxis
Why is Bitcoin so Interesting Anyway?
Since the beginning of the internet, cypherpunks everywhere advocated for strong use of cryptography and privacy technologies to push for social and political change. Although their ideology had its flaws (like the use of cryptography standards that made user experience difficult for the average computer-user), they raise some good points and questions that need to be answered around data protection and privacy.
One of the interesting questions brought up was, if with the public infrastructure of the internet we can now share ideas across the globe through digital means, can we also create a monetary system which is completely run over the internet without any central authority to govern it? So to give you some context, in case it doesn’t sound profound, when you share something on the internet, you’re not literally giving them the same thing you’re seeing on your screen. When you press send on that email to Karen in HR, Karen’s email application is receiving a copy of that email you sent explaining how Todd in Finance keeps eating really loudly at his desk. Now both you and Karen have a copy of that mess. Compared to a letter where you actually have to write on a physical piece of paper about how Todd’s mess is stinking up your floor of the office and make sure that same piece of paper is sent to Karen so that she can then refer you to section 4.20 in the employee handbook on “conflict resolution in the workplace”.
As you can imagine, the limitation of the internet only being able to send a copy of information makes it a difficult to use it as an infrastructure for a global monetary system without a central authority. If I try to send a dollar through email, all I’ve done is created another dollar so now there are two dollars. If we add a central authority to say only the second dollar has worth and the first one doesn’t, this authority would now have the power to censor specific parties for their own gain. Another problem with making a traditional Client / Server database that keeps track of money is how is everyone going to trust the entity that owns the database to not manipulate it. Would it be surprising to find that the head of this database mysteriously has $1 million more dollars in their account? How would the authority be able to assure us that a bad actor can’t hack into the system to do the same for themselves?
If you guessed using a P2P Network rather than a traditional Client / Server model, then you’d be correct! So in 2008, a bunch of developers lead by a mysterious account named Satoshi Nakamoto released the Bitcoin Whitepaper on an online cryptography forum that described a Peer-to-Peer Payment System that was free from any oversight from a central authority and run completely by the nodes in the network. Did I mention this was during the peak of the Great Recession where bankers got away with causing an immense amount of economic violence against the population without any repercussions and free money because they were too big to fail? The nerds went wild.
Bitcoin Genesis Block Raw Data – We may not know who Satoshi was, but I’d bet he didn’t like the big banks receiving bailouts like most normal people.
Once deployed in early 2009, bitcoin showed that specialized nodes called miners on a P2P Network could each keep track of the ledger that detailed the amount of money (bitcoin) everyone else had without needing some “gubmint” or company to do it for them. Using home computers, a new way to transact “value” was created. By making computers and special harware exert computational energy to solve complex math problems for adding transactions and winning a reward, the blockchain backbone, nerds proved that we could automate the function of an entire monetary system. The open architecture of this P2P Network also allowed the average person to keep track of their own copy of the ledger and make sure that all the miners and blocks of transactions were following the predetermined rules of the bitcoin network. Also for some unknown reason, our friend Satoshi Nakamoto quickly disappeared, never to be heard of again and his internet posts became sacred texts to bitcoin superfans.
Like companies did to Napster after its release, people started to make different variations of “bitcoin-but-different” cryptocurrencies in order to attempt to make improved versions of it. Most of them didn’t catch on much because HOW DARE YOU QUESTION THE GENIUS OF SATOSHI NAKAMOTO OUR LORD AND SAVIOR?! However, one notable successor, Ethereum, did come out to be pretty big for figuring out a neat trick called smart contracts.
Smart Contracts
Now that we have established that it’s possible to create a P2P infrastructure for sending value (cryptocurrency) to people across the world without needing a central authority using blockchain, we have the material conditions to program cryptocurrencies to move from one place to another based on predetermined criteria. To demonstrate, let’s look at a situation and how you have to respond to it today versus if we lived in Blockchain World™.
The basic outline of a contract except its conditions are rooted in computer code.
Say that you bought a flight back to your hometown with insurance and a week before your flight it’s cancelled. In the world that we live in today, as part of the airline’s policy you may have to call their customer service and request a refund even though it isn’t your fault the flight was cancelled. In Blockchain World™ you could enter an in insurance agreement in the form of a smart contract with the purchase of your flight which would be programmed so that IF your flight is cancelled THEN you would automatically receive a refund without lifting a finger, because that’s how it should be.
Now, it could be argued that an airlines can still automate this process within their own centralized systems. However, the point is here is not the automation itself but the immutability of the contract that has been agreed upon by the purchaser and the airlines. In the Blockchain World™ example, the purchaser does not need to trust United Airlines that they are going to pay them back. In the Code of the Contract, the purchaser can see very clearly the inputs needed for the contract to send money. The contract can’t be interpreted by a paid off judicial system because the smart contract isn’t owned by any single person, it’s owned by the network. The smart contract is essentially a trustless interaction between parties that can give certain protections to its participants. This has the potential to greatly limit the exploitative power that the bourgeoisie has over the working class.
In this situation and many like it, blockchain is able to make a more transparent interaction between parties, especially if there is a large power gap. This is of course a very simple example to make it easier to understand but with this fundamental feature, we can then create more complex Smart Contracts that apply to more meaningful situations. At first glance this may not seem especially useful but in the next section I’ll go into more detail that shows how exactly Smart Contracts and blockchain in general could be co-opted for Leftist™ causes. Click here to go to Part 3.
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